Optical/IP Networks

AT&T, TWC Fit Beaumont for Caps

Beaumont, Texas, home to the World’s Largest Fire Hydrant, is less than half the size of Fort Worth and yet more than one service provider is using it as a proving ground for capping Internet usage.

In addition to Time Warner Cable Inc. (NYSE: TWC), AT&T Inc. (NYSE: T) has been putting policies in place to charge extra for conspicuous consumption. AT&T, which is also testing its Internet metering in Reno, Nev., says it started trials in both cities last year for new residential broadband customers. (See Congressman Mad About TWC's Internet Meter .)

The usage limits AT&T allows range from 20 gigabytes for its low-end DSL package, to 150 GB for its top offering. Like Time Warner Cable, AT&T's customers are billed $1 per GB used after they go over the cap.

Time Warner has the three lowest caps -- the easiest for consumers to hit -- when compared directly to AT&T's trial in the same metro area:

Table 1: Internet Usage Caps (Beaumont, Texas)
Service Provider Bandwidth Cap (GBs) Internet Speed (Mbit/s)
AT&T 150 10
AT&T 150 18
AT&T 80 6
AT&T 60 3
Time Warner Cable 40 10
AT&T 40 1.5
AT&T 20 0.768
Time Warner Cable 20 7
Time Warner Cable 10 3
Time Warner Cable 5 0.768
Sources: Time Warner Cable, AT&T, The ghost of Mildred "Babe" Didrikson Zaharias.

AT&T says it can't yet provide detailed data on how many of its customers have gone over their allotted bandwidth cap. A spokeswoman says that about half the company's residential broadband traffic comes from only 5 percent of its customers -- and these trials are aimed at curbing those power users (or getting them to upgrade).

Existing AT&T customers in Beaumont and Reno will enter the metered-billing trial if they exceed a 150-gigabyte limit on their monthly bandwidth. After the first time over the cap, they're given a one-month grace period where no additional charges are assessed and AT&T gives them a tool to help them see how much bandwidth they're using. One more time over the cap, though, and the charges start to stick.

These bandwidth caps in the two trial cities do apply to U-verse customers, but only to the broadband Internet portion of U-verse (so you can still watch HDTV all day).

While AT&T points out that 150 GB is a reasonable cap -- you could download 30,000, 5-minute MP3 files, they like to point out -- consumers of over-the-top video content will need to watch their bandwidth meter, especially if they prefer to rent HD videos from a third-party set-top.

A 45-minute HDTV show (The History Channel's The Universe, in fact) downloaded on an Apple TV, takes up 1.32 GB of the consumption cap, and that show is encoded in MPEG-4. So at roughly 1.8 GB per hour of content, there's a lot of download room in a 150 GB cap, assuming that all you do is watch TV all day.

AT&T says it hasn't reached any conclusions yet from its trials, but says the exercise is helping it evaluate usage trends and find a way to provide affordable, high-quality broadband service.

— Phil Harvey, Editor-in-Chief, Light Reading

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